Suppose that in Mysore, the reserve—deposit ratio is
res = 0.5 - 2 i,
where i is the nominal interest rate. The currency—deposit ratio is 0.2 and the monetary base equals 100. The real quantity of money demanded is given by the money demand function
L(Y, i) = 0.5Y - 10i,
where Y is real output. Currently, the real interest rate is 5% and the economy expects an inflation rate of 5%. The money multiplier equals
A) 2.00.
B) 2.40.
C) 3.00.
D) 4.00.
B
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A normal profit for a self-employed entrepreneur is I. an opportunity cost. II. part of the implicit rental rate of the funds invested in the business
A) only I B) only II C) both I and II D) neither I nor II
If bond prices are plotted on a graph with interest rates on the vertical axis,
A. the curve produced has a positive slope. B. the curve display no relationship to one another. C. the curve produced has a negative slope. D. the curve is a horizontal straight line at the current interest rate.
The market demand for loanable funds is represented by a(n) ________ demand curve, reflecting a declining rate of return on investment
a. downward-sloping b. upward-sloping c. positively-sloping d. horizontal
From the late 1960s to the late 1980s, in the United States SAT scores
A. and graduation rates increased. B. and graduation rates decreased. C. and school attendance rates decreased. D. decreased and school attendance rates increased.